7. Value of Lockboxes (LO2] Paper Submarine Manufacturing is investigating a lockbox system to reduce its collection time. It has determined the following: Average number of payments per day Average value of payment 485 $935 $.15 Variable lockbox fee (per transaction) Daily interest rate on money market securities .068% The total collection time will be reduced by three days if the lockbox system is adopted. a. What is the PV of adopting the system? b. What is the NPV of adopting the system? c. What is the net cash flow per day from adopting the system? Per check? B D E F G H 1 Chapter 19 Question 7 2 3 4 5 Input Area: 6 7 8 $ 9 10 Average # of payments per day Average value of payment Variable lockbox fee Daily interest rate on MM securities Decreased collection time 485 935 0,15 0,068% 3 11 12 13 Output: a. PV 14 15 16 17 18 19 20 21 22 23 b. NPV c. Net cash flow per day Net cash flow per check 24 25 26 27 28 29